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2017-11-14 17:42
By Yoon Sung-won



Naver founder Lee Hae-jin
Google Korea CEO John Lee
The heated dispute between Naver and Google, triggered by a remark by the former’s founder Lee Hae-jin during the parliamentary audit last month, seems to have reached a plateau.

For the past five days, Google Korea has not responded to Naver’s urge to open its gains in the Korean market and to jointly receive external verification on the fairness of their respective search engine services. The situation is expected to remain in stalemate for the time being, according to industry sources.

This seemingly abrupt discord between the two companies is rather unsurprising as it is based on their race for supremacy in their new platform businesses in the domestic market.

Both companies started as search engine service providers. Naver has established its dominance as the top search engine in Korea while Google is winning globally, except in Korea.

Tapping into their powerful influences, the two companies have expanded to new platform businesses such as video streaming and cloud.

Though Naver, as an operator of an integrated web portal, could defend its supremacy over Google in the search engine service sector, the latter has been more successful here with its platform services.

In particular, YouTube has overwhelmed other domestic video streaming services with a massive amount of content created and provided from around the world. According to mobile market tracker WiseApp, Korean Android smartphone users have spent more time on YouTube than on any other apps in September, even more than on Kakao Talk and Naver.

Besides the video streaming service, Naver and Google are expected to compete for other areas such as autonomous driving and voice-recognition digital assistant, machine translation and diverse artificial intelligence (AI)-based services in the future.

Considering Google’s aggressive research and development drive, it is highly likely to be a tough competition for Naver.
Against such a backdrop, it will be essential for Naver, which seeks to be a socially trusted platform operator, to protect its brand value. It will not be just about pride but also a matter of survival.

Though both Naver and Google are raising their voices over righteousness and fairness of their business operations, consumers know that both of them are not without faults.

Naver has recently admitted that one of its executives accepted an unfair solicitation from a local sports body to hide news articles that are critical about the organization. This scandal inflicted heavy damage on the web portal operator’s reliability.

Google has been repeatedly criticized for dodging taxes in Korea by allegedly shifting the massive profits it has generated in Korea to tax havens. Still, Google Korea has refused to open the information about the amount of profits it has earned here behind the privilege in has as a limited liability company.

Ahn Chang-nam, a professor of taxation and finance at Kangnam University, pointed out, “Despite their great influence in the market and society, little could have been done so far to control the two IT giants under the current laws here.”

The role of Korea’s policymakers should be to take the high social interest drawn to these issues as an opportunity to seek legal measures to protect the interests of consumers and society.


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